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Nektar's (NKTR) Q3 Earnings and Revenues Beat Estimates
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Nektar Therapeutics (NKTR - Free Report) reported a loss of 24 cents per share for the third quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 47 cents and the year-ago quarter’s loss of 70 cents.
Quarterly revenues were down 5.2% year over year to $23.6 million during the quarter. Revenues also beat the Zacks Consensus Estimate of $23 million.
Shares of Nektar were up 2% in after-market trading on Nov 3 due to the better-than-expected results. Yet, the stock has plunged 73.7% this year compared with the industry’s 30.7% decline.
Image Source: Zacks Investment Research
Quarter in Detail
Nektar recognizes product sales from its manufacturing and supply agreements with several pharma companies related to products developed using its PEGylation platform. The company also earns royalty payments from the sales of products using its technology platforms.
In the third quarter, product sales declined 4.3% from the year-ago quarter’s levels to $5.0 million. Non-cash royalty revenues were $18.3 million in the quarter, down 5.5% from the year-ago quarter’s levels.
License, collaboration and other revenues were $0.3 million in the quarter, in line with the year-ago quarter’s figure.
Research and development (R&D) expenses declined 67.6% to $33.6 million. General and administrative (G&A) expenses were down 24.0% year over year to $22.5 million in the reported quarter. The lower expenses were due to the discontinuation of the development of the company’s lead candidate, bempegaldesleukin (bempeg), in April.
Following the discontinuation of the bempeg program, Nektar announced strategic plans to focus on its other pipeline candidates and extend its cash runway. During the quarter, Nektar recorded expenses of $16.8 million as restructuring, impairment and other costs of the terminated program. In the year-to-date period (till September 2022-end), the company recorded $124.3 million as restructuring costs for the terminated program.
Cash and investments in marketable securities as of Sep 30, 2022, were $546.4 million compared with $628.2 million as of Jun 30, 2022.
NKTR expects its cost-saving initiatives to help it end 2022 with approximately $450 million in cash resources. It expects this amount to be sufficient to fund its operations through mid-2025.
2022 Guidance
Management expects full-year revenues to be between $85 million and $95 million. This includes $20 million worth of product sales and $70-$75 million in non-cash royalties.
Management also projects full-year R&D expenses in the range of $240-$250 million, while G&A expenses are expected to be between $90 million and $95 million for 2022.
Management also expects to incur between $150 million and $160 million in restructuring and impairment charges related to the terminated bempeg program.
Pipeline Updates
In the first half, the company suffered back-to-back study failures. Some pivotal clinical studies evaluating the combination of bempeg plus Bristol-Myers’ (BMY - Free Report) immunotherapy drug, Opdivo, in separate clinical studies for melanoma indication and renal cell carcinoma (RCC) and bladder cancer failed to achieve study goals. As a result of these dismal data readouts, Nektar and partner Bristol Myers decided to discontinue all development programs for bempeg.
The partnership with Bristol Myers was one of Nektar’s most lucrative deals providing the company with significant cash resources to support the progress of its pipeline. As a result of this discontinuation, the partnership with Bristol Myers has now come to a close and Nektar is no longer eligible to receive any payments.
Nektar is currently focusing on its other key pipeline candidates, rezpegaldesleukin (formerly NKTR-358) and NKTR-255. The company will also focus on several core research programs. It also implemented a cost restructuring plan to extend its cash runway.
Nektar’s partner, Eli Lilly (LLY - Free Report) is evaluating rezpegaldesleukin in mid-stage studies involving patients with systemic lupus erythematosus (SLE). Lilly plans to initiate two more mid-stage studies to evaluate the candidate as a potential treatment for atopic dermatitis (AD) soon and another undisclosed auto-immune indication next year. The drug demonstrated sustained disease control for at least six months in AD patients in a previously complete proof-of-concept study.
Nektar is developing NKTR-255 as a cell therapy potentiator to boost the anti-tumor immune response of other cancer therapies, especially CAR T therapies. The candidate is currently in early-stage development and is being evaluated for multiple oncology indications.
Gilead’s stock has risen 9.4% this year so far. While Gilead’s earnings estimates for 2022 have risen from $6.61 to $7.02 per share in the past 60 days, estimates for 2023 have increased from $6.32 to $6.79 per share during the same period.
Gilead beat earnings estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 0.36%. In the last reported quarter, GILD delivered an earnings surprise of 31.94%.
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Nektar's (NKTR) Q3 Earnings and Revenues Beat Estimates
Nektar Therapeutics (NKTR - Free Report) reported a loss of 24 cents per share for the third quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 47 cents and the year-ago quarter’s loss of 70 cents.
Quarterly revenues were down 5.2% year over year to $23.6 million during the quarter. Revenues also beat the Zacks Consensus Estimate of $23 million.
Shares of Nektar were up 2% in after-market trading on Nov 3 due to the better-than-expected results. Yet, the stock has plunged 73.7% this year compared with the industry’s 30.7% decline.
Image Source: Zacks Investment Research
Quarter in Detail
Nektar recognizes product sales from its manufacturing and supply agreements with several pharma companies related to products developed using its PEGylation platform. The company also earns royalty payments from the sales of products using its technology platforms.
In the third quarter, product sales declined 4.3% from the year-ago quarter’s levels to $5.0 million. Non-cash royalty revenues were $18.3 million in the quarter, down 5.5% from the year-ago quarter’s levels.
License, collaboration and other revenues were $0.3 million in the quarter, in line with the year-ago quarter’s figure.
Research and development (R&D) expenses declined 67.6% to $33.6 million. General and administrative (G&A) expenses were down 24.0% year over year to $22.5 million in the reported quarter. The lower expenses were due to the discontinuation of the development of the company’s lead candidate, bempegaldesleukin (bempeg), in April.
Following the discontinuation of the bempeg program, Nektar announced strategic plans to focus on its other pipeline candidates and extend its cash runway. During the quarter, Nektar recorded expenses of $16.8 million as restructuring, impairment and other costs of the terminated program. In the year-to-date period (till September 2022-end), the company recorded $124.3 million as restructuring costs for the terminated program.
Cash and investments in marketable securities as of Sep 30, 2022, were $546.4 million compared with $628.2 million as of Jun 30, 2022.
NKTR expects its cost-saving initiatives to help it end 2022 with approximately $450 million in cash resources. It expects this amount to be sufficient to fund its operations through mid-2025.
2022 Guidance
Management expects full-year revenues to be between $85 million and $95 million. This includes $20 million worth of product sales and $70-$75 million in non-cash royalties.
Management also projects full-year R&D expenses in the range of $240-$250 million, while G&A expenses are expected to be between $90 million and $95 million for 2022.
Management also expects to incur between $150 million and $160 million in restructuring and impairment charges related to the terminated bempeg program.
Pipeline Updates
In the first half, the company suffered back-to-back study failures. Some pivotal clinical studies evaluating the combination of bempeg plus Bristol-Myers’ (BMY - Free Report) immunotherapy drug, Opdivo, in separate clinical studies for melanoma indication and renal cell carcinoma (RCC) and bladder cancer failed to achieve study goals. As a result of these dismal data readouts, Nektar and partner Bristol Myers decided to discontinue all development programs for bempeg.
The partnership with Bristol Myers was one of Nektar’s most lucrative deals providing the company with significant cash resources to support the progress of its pipeline. As a result of this discontinuation, the partnership with Bristol Myers has now come to a close and Nektar is no longer eligible to receive any payments.
Nektar is currently focusing on its other key pipeline candidates, rezpegaldesleukin (formerly NKTR-358) and NKTR-255. The company will also focus on several core research programs. It also implemented a cost restructuring plan to extend its cash runway.
Nektar’s partner, Eli Lilly (LLY - Free Report) is evaluating rezpegaldesleukin in mid-stage studies involving patients with systemic lupus erythematosus (SLE). Lilly plans to initiate two more mid-stage studies to evaluate the candidate as a potential treatment for atopic dermatitis (AD) soon and another undisclosed auto-immune indication next year. The drug demonstrated sustained disease control for at least six months in AD patients in a previously complete proof-of-concept study.
Nektar is developing NKTR-255 as a cell therapy potentiator to boost the anti-tumor immune response of other cancer therapies, especially CAR T therapies. The candidate is currently in early-stage development and is being evaluated for multiple oncology indications.
Nektar Therapeutics Price
Nektar Therapeutics price | Nektar Therapeutics Quote
Zacks Rank & Stock to Consider
Nektar currently has a Zacks Rank #3 (Hold).
A better-ranked stock in the biotech sector is Gilead Sciences (GILD - Free Report) , which currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Gilead’s stock has risen 9.4% this year so far. While Gilead’s earnings estimates for 2022 have risen from $6.61 to $7.02 per share in the past 60 days, estimates for 2023 have increased from $6.32 to $6.79 per share during the same period.
Gilead beat earnings estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 0.36%. In the last reported quarter, GILD delivered an earnings surprise of 31.94%.